080321 Understanding Term, Cash Value Insurance…

If there are people in your life who would be financially

affected when you die, you should consider taking out

a life insurance policy. Exactly what kind of life insurance

and how much depends on your life situation.

 

The needs of a senior are very different than the needs

of a young family. Some policies cost more than others;

some have a built-in savings component. It’s important to

understand your life insurance options, how they work,

and what’s best for your situation.

 

Term Insurance…

Term insurance is the least expensive type of life insurance.

It has a level death benefit, meaning the benefit that’s paid

to your beneficiary remains the same through the life of

your policy. Your policy premium is level for the term period,

which can be five years, 10 years or more. Term policies

don’t build up any cash value, or savings, within the policy.

Cash Value Insurance…

There are two types of cash value insurance: whole life and

universal life. Whole life insurance has a level premium and

a level death benefit. It gradually builds up cash value over time.

It’s considerably more expensive than term insurance.

Universal life insurance has flexible premiums, so you can pay

more or less over time, although you’ll want to keep paying a

minimum to keep the policy in force. If you pay more into it,

it builds up savings faster. You can borrow against the cash

value in either type of policy; you can withdraw cash value

from a universal life policy, as well.

Determining Your Need…

How much life insurance you need depends on your individual

situation. Seniors should account for final expenses, and any

other debt they may leave behind. If you have a spouse, you

should consider whether his/her income will need to be

supplemented. If you have children, you should include their

child care needs and college education. If there is a religious

institution or charity that’s special to you, you may want to

include that as well.

 

Edited by H.C.
https://www.consumerdaily.com/tips/understanding-term-cash-value-insurances/